"When the facts change, I change my mind. What do you do sir?" - John Maynard Keynes
Well Nintendo investors. The facts have changed.
54k Wii U's sold, followed by 39k...world-wide, in the last 2 weeks.
Abandon ship! Abandon ship! Abandon ship!
The Wii U is an early failure and now must climb out of a deep hole. My investment time-frame was short-term, when I bet on the Wii U in June 2012.
Oddly I still think I was right back then, about the Wii U. I was just wrong about Nintendo. I could never have forseen: a massive Day 1 update, a poor GamePad battery life, Black Ops II selling so atrociously on Wii U, the Wii U gameplay capabilities being showcased so ineffectively in the launch games, Madden & Fifa being the definitively inferior versions, the Marketing being non-existent to really bad, TVii being delayed and then peetering out, AAA Game launches being pushed-back.
It was a perfect storm of let's just sum it up as - badness, to deflate the Wii U's balloon, to stop its momentum, to prevent anyone but the Nintendo faithful to purchase the machine.
Nintendo will post a strong Q3 in a couple days. But when they drastically cut the Wii U's numbers on Hardware & Software, and I mean drastically - the near-term future of Nintendo will look so bleak to Investors, that no Yen weakening, no Holiday profits, no game announcements, will move the stock far upwards.
This doesn't even take into account the 3DS misses. They'll be cutting fiscal 2012 Hardware & Software there, too. The 6 Billion Yen Annual profit projections had Wii U hardware & software, and 3DS hardware & software sales baked into it. Now, Nintendo is most likely going to post 2 Annual losses in a row.
In fact when Investors see what's happening with Wii U & 3DS...how badly both systems are missing expectations, I'm betting Nintendo stock drops 10% - 20% from todays levels, down to the $10 - $11 range. Trading for below book-value, essentially just for the cash they have in the bank.
Long-term, Nintendo will be fine. And the Wii U can have a big comeback. But for me right now, there's lots of better places for my money. And yours too.
